Want to Know What Audits Might Be Costing You?

Post-payment audits can quietly cost your health system millions each year — not just in overpayments, but in time, staffing, and appeal effort.

Use this estimator to project the impact based on your system’s size and performance metrics:

• Health System Size (in beds)
• Average Overpayment per Finding (typically $6,380 for DRGs)
• Audit Finding Rate – What percent of ADRs result in overpayments? - Try changing this rate from 30% to 20%
• Appeal Rate – What percent of findings your team actually appeals?
• Appeal Success Rate – How often you win those appeals?

Post-payment ADRs are not simply information requests like their pre-payment counterparts. They are targeted recoupment efforts, often hand-selected by auditors for high-value DRGs like Sepsis, where documentation or coding vulnerabilities are assumed. The money is already paid — now it's at risk.

Reduce the Audit Burden by Targeting the Right Lever

Here are three main ways to reduce financial exposure:

1. Lower the Finding Rate - This is your best lever and least used by providers. Well prepared ADR submissions means auditors find fewer overpayments — reducing both appeals and revenue loss.

2. Appeal More Findings - Many hospitals accept recoupments they could challenge. Increasing appeal volume reduces unrecovered dollars.

3. Win More Appeals - You win more when qualified staff have the time to systematically and thoroughly review findings and prepare strong appeals.

Appeal Rate and Success Rate: Strategy Matters

Appeal Rate and Appeal Success Rate are closely linked — and one affects the other.

• Appealing 100% of findings lowers your win rate but ensures full coverage.
• Appealing selectively raises your win rate but risks leaving money on the table.

Some audits justify 100% appeals (e.g., not permissible by contract). Others don’t. The key is being able to efficiently appeal everything when necessary — and have the time to focus on what’s winnable.

Post-payment ADRs are initiated with recoupment in mind — not clarification. They’re looking for money back, not just "additional information." That’s why it’s critical to submit well-prepared documentation at the ADR level — and to have a consistent, repeatable process. In other words, make your ADR response your 1st appeal.